In This Article:
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Revenue: $196.3 million, a 19% year-over-year increase.
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Non-GAAP Operating Margin: 24%, expanded by over 10 percentage points compared to last year.
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Adjusted Free Cash Flow Margin: 28%, with adjusted free cash flow of $55.4 million, a 43% year-over-year growth.
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Net Dollar Retention: 105% on a constant currency basis.
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Total Customers: Over 73,300, with more than 1,000 net new customers added in the quarter.
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EX Business ARR: Over $420 million, a 33% year-over-year growth on a constant currency basis.
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CX Business ARR: Over $370 million, a 7% year-over-year growth on a constant currency basis.
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Calculated Billings: $203.3 million, a 16% year-over-year growth on an as-reported basis.
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Cash, Cash Equivalents, and Marketable Securities: $1 billion.
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Share Repurchase: $111.8 million repurchased at an average price of $16.60 per share.
Release Date: April 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Freshworks Inc (NASDAQ:FRSH) reported a 19% year-over-year revenue growth to $196.3 million in Q1 2025.
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The company achieved a non-GAAP operating margin of 24% and an adjusted free cash flow margin of 28%, surpassing financial estimates.
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Freshworks Inc (NASDAQ:FRSH) added over 1,000 net customers in the quarter, including large enterprises like Freudenberg Group and All3Media.
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The company maintained a net dollar retention rate of 105% on a constant currency basis, consistent with the previous two quarters.
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Freshworks Inc (NASDAQ:FRSH) saw significant growth in its Employee Experience (EX) business, surpassing $420 million in ARR with a 33% year-over-year growth.
Negative Points
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Despite strong performance, Freshworks Inc (NASDAQ:FRSH) faces uncertainties in the macroeconomic environment and market volatility.
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The company anticipates increased expenses in Q2 due to annual merit cycles and investments in sales and marketing, which may impact operating margins.
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Freshworks Inc (NASDAQ:FRSH) is experiencing competitive pressure from legacy software vendors, which could affect market share.
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The company is navigating through a period of market volatility and economic uncertainty, which could impact future performance.
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Freshworks Inc (NASDAQ:FRSH) is dealing with internal changes, such as the departure of a key sales executive, which could pose challenges in maintaining sales momentum.
Q & A Highlights
Q: Can you provide an update on Device42 and its impact on platform wins? Also, how is the CX business performing in terms of agent and seat growth? A: Dennis Woodside, CEO, explained that Device42 had a great quarter, primarily driving platform wins through upselling to existing customers and new deals. Two of the top five deals included Device42. In the CX business, agent count and AI solution adoption continue to grow, with optimism about the future of AI Agent and Insights products.